Pork Futures: Hogs Climb

CHICAGO - Chicago Mercantile Exchange lean hogs closed higher Monday on short covering, supportive fundamentals and February fund buying.
calendar icon 11 December 2007
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Also, pork bellies gained substantial ground while live and feeder cattle ended up slightly.

CME hogs perked up on the open fueled by carryover short covering, Friday's modest pork cutout rise and mostly steady-to-firm initial terminal hog market quotes.

Despite a mild dose of early buyer reluctance due to board premiums to CME's hog index, pork contracts made significant headway. Upward momentum was later driven by aggressive spread liquidation out of December into February and April in advance of December's schedule expiration on Dec. 14.

Concern about another winter storm already approaching the fringes of the western U.S. cornbelt also provided underlying spot-December support. And December stabilized after earlier testing 55.50-cent psychological support, although the contract reacted briefly to negative midday direct hog price news.

And, several market participants followed an agricultural research firm's advice and bought April lean hogs on Dec. 10.

Monday's unexpected rally left a bad taste in the mouths of market bears who anticipate a downward adjustment on Tuesday.

Source: FXstreet.com
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